Venezuela is undergoing the typical collapse of a country that has been subject to years of all kinds of political interventions. The fall in oil prices is the external shock that brings to light the embarrassing result of years of price controls, currency controls, nationalizations, uncontrolled monetary creation, and economic dirigisme.
With non-hope-based GDP forecasts for Q1 at cycle lows, today's wholesale inventories decline will not help. After dropping in January, and rebounding in Feb, March saw inventories drop 0.1% (against expectations of a 0.2% rise). This is the first quarterly decline in wholesale inventories since Q1 2016 (when the world was feared to be heading into recession).
After six months of laboring late into the nights, this fourth rendition of Trump’s plan has not changed much from election day, and it’s equal in depth and detail to the kind of outline you come up with after a day of brainstorming.
While loan performance improved across various loan types throughout the first five years of the expansion, over the last year three of the four major types of loans began experiencing a deterioration in loan performance.
Coming up with a Trump tax plan seems to be overtaxing the maestro of negotiation, who is now on his fourth plan. I'm betting the best we’ll see on this day of promised delivery is a general synopsis free of any details.
The implementation of the Greek pension reform of 2016, will lead to the sudden death of incomes for widows, and as KeepTalkingGreece reports, will push a large portion of population further into poverty. Widows’ pensions will be cut down to 50% of the deceased’s pension and new more restrictive age-based criteria will go into effect this month.
While it is unclear if the Chinese, tired of fighting regulations in Canada, are behind the latest jump in home prices, today Case-Shiller reported that its index of Top 20 cities rose at a 5.9% annual rate, the highest increase since July 2014, citing tight supply and growing housing demand.
Candidate Trump loved a strong dollar, said the Fed's low interest created inequality and a false economy and hinted Janet Yellen needed to go. Now that he’s the president, he loves all three and wants them to stay.
Mister Maduro, in order to buy a bit more time in the presidential mansion, is selling the golden goose. For those who wonder why it’s so often the case that a nation that’s been knocked down economically rarely rises up again within the same generation, the answer is manifestly clear in Venezuela...
What all this warrants is extreme caution in Bubbleville. With geopolitical risk flashing bright red, half percent GDP growth, record high equity valuations and a delusional Fed that continues threatening interest rate normalization; the market’s reality check is surely imminent.
Candidate Trump has revolved into a President no one saw coming. It's not that he hasn’t accomplished enough in his first 100 days, but that he's accomplished too much in the wrong direction. He's made Russian relations worse than Hillary did and taken regime change further than Obama!
There is much debate about where the U.S. economy is ultimately heading, but what everybody should be able to agree on is that economic conditions are significantly worse this year than they were last year.